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8/11/2019 Session 2 Professional Bodies Study
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Public Consultation & Seminar on Fixing of Prices/Scale of Fees by Professional Bodies19 May 2014 (Monday)PNS Auditorium, PNS Tower, Kuala Lumpur
1
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SHILA DORAI RAJ
Chief Executive Officer of the
Malaysia Competition Commission
2
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PUBLIC CONSULTATION & SEMINAR ON FIXING OF
PRICES/SCALE OF FEES BY PROFESSIONAL BODIES
UNDER THE COMPETITION ACT 2010
3
Part 1What are Professional Bodies?
Part 2Findings
Part 3Position of Professional Bodies
Under Competition Act 2010
Part 4Future Directions
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Overview of the
Market Review on Issues Relating to the Fixing ofPrices / Fees By Professional Bodies
5
Q4 2012 The MyCC commissioned consultant to begin the market review
Q2 2013 The findings of the research project on price fixing by professional bodieswere approved by the Commission on 16 July
Q3 2013Report of the results of the study was uploaded to the MyCC websiteon 19 August
Q3 2013Letter to the 5 sectors identified (NO legal authority to fix prices/fees) - to providean explanation for these practices were sent on 14 August
Q4 2013 The MyCC has received comments from professional bodies
Q2 2014 Public Consultation with Professional Bodies on 19 May 2014
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Definition of Professional Bodies
6
Professions typically has 3 main characteristics:
a) Possession and use of expert and specialized knowledge;
b) Strict control of entry into profession; and
c) Existence of a professional code or conduct of ethics.
ProfessionsLearned
professionsLiberal
professionsProfessional
services
There is no legal definition of professionalbodiesin Malaysia.
BlacksLaw Dictionary defines a professionalas a person who belongs to
a learned profession or whose occupation requires a high level of training
and proficiency.
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Definition of Professional Bodies (Continue)
7
Conventional
Law
Medicine
ReligiousMinistry
Modern
Otheroccupations
Traditionally 3
learned professions
For the purposes of Government policy - the
scope and classification of professions orprofessionals depend heavily on the
context in which such classification is made,
i.e. the scope, content and objectives of the
policy in question.
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Research Result
8
Practice of Price-Fixing by Bodies/Associations in the
Services Sectors Malaysia
Research was carried out on 131 bodies/associations that are
grouped into 34 sectors.
The grouping of these sectors is guided by the relevant law
pertaining to the sectors (where available) and the WTO ServicesSectoral Classification.
8/11/2019 Session 2 Professional Bodies Study
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9
Architects Engineers Quantity surveyors Land Surveyors Valuers, Appraisersand Estate Agents
Town Planners Accountants Legal Practitioners Company
Secretaries
Medical
Practitioners
Dental Practitioners Optometrists Pharmacists Allied health
professionals
Midwives and
nurses
Chemists Scientists Veterinary surgeons Counselors Alternative Dispute
Resolutions (ADR)
Arbitrators
Alternative Dispute
Resolution (ADR)
Mediators
Landscape
Architects
Social workers Logistic & Transport
Executives
Material scientists/
specialists
Public relationexecuitves
Intellectual propertypractitioners
Environmentconsultant
Investors relationsexecutives
Life Insuranceadvisers & financial
planners/
practitioners
Actuaries Agricultural
specialists
Forestry specialists Plantation managers Food analyst
The 35 Sectors Studied are as Follows:
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PRESENTATION OVERVIEW
Part 2 - Findings
Part 1 - What are Professional Bodies?
Part 4 - Future directions
10
Part 3 - Position of Professional Bodies Under CA 2010
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Finding No. 1 -
11
10 sectors are found to be governed by respective bodies/associationsthat are empowered by legislation to regulate such sectors and scales
of fees are established for their members:
SECTOR /
GOVERNINGBODY
GENERAL
POWER TOREGULATE
SPECIFIC
POWER TO FIXSCALE OF SCALE OF FEES
1. Architects:
Board of
Architects
Malaysia
X
S35 of the
Architects Act
1967
X
S4(1)(d) & (dd)
of the Architects
Act 1967
Architect (Scale of Minimum Fees) Rules 2010
[P.U.(A) 53/2010]
2. Engineers:
Board of
Engineering
Malaysia
X
S4 of the
Registrations of
Engineers Act
1967
X
S4(1)(d) of the
Registrations of
Engineers Act
1967
I - Notification of Scale of Fees [P.U.(B) 548/1998]
ii- Notification of Scale of Fees for Housing
Development [P.U.(B) 288/1997]
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Finding No. 1 (Continue)
12
SECTOR /
GOVERNING
BODY
GENERAL
POWER TO
REGULATE
SPECIFIC
POWER TO FIX
SCALE OFSCALE OF FEES
3. Quantity
Surveyors:
Board of Quantity
Surveyors Malaysia
X
S26 of the
Quantity Surveyors
Act 1967
X
S 4(d) of the
Quantity
Surveyors Act
1967
i- For Government projects: Scale of Fees For
Consulting Quantity Surveyor (Revised 2004)
issued by the Ministry of Finance, to be read
together with the Notification made under
the Registration of Quantity Surveyors Act
1967 [P.U.(B) 510/1986].
ii- For non-Government projects:
Notification made under the Registration of
Quantity Surveyors Act 1967 [P.U.(B) 510/1986].
4. Land
Surveyors:
(a) The Land
Surveyors Board
(Peninsular
Malaysia &
Labuan)
X
S21(1) of the
Licensed Land
Surveyors Act
1958
Regulation 26(1) and 13thSchedule of the
Licensed Land Surveyors Regulations 2011
[P.U.(A) 331]
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Finding No. 1 (Continue)
13
SECTOR /
GOVERNING
BODY
GENERAL
POWER TO
REGULATE
SPECIFIC
POWER TO FIX
SCALE OFSCALE OF FEES
(b) Sabah
Surveyors Board
X
S19(1) of the
Surveyors
Ordinance 1960
[No. 22 of 1960]
The 2nd Schedule of the Surveyors (Registration
and Administration) Regulations 1989.
(c) Land
Surveyors Board,
Sarawak
X
S31(1) of the Land
Surveyors
Ordinance 2001
[Chapter 40]
X
S31(2) of the
Land Surveyors
Ordinance 2001
[Chapter 40]
Rule 36(1) and the 1stSchedule of the Land
Surveyors (Conduct of Cadastral Land Surveys)
Rules 2003.
5. Valuers,
Appraisers and
Estate Agents:
Board of Valuers,
Appraisers and
Estate Agents
X
S32 of the Valuers,
Appraisers and
Estate Agents Act
1981
Rule 48(1) and 7th Schedule of the Valuers,
Appraisers and Estate Agents Rules 1986
[P.U.(A) 64/86].
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Finding No. 1 (Continue)
14
SECTOR /GOVERNING
BODY
GENERALPOWER TO
REGULATE
SPECIFICPOWER TO FIX
SCALE OFSCALE OF FEES
6. Town Planners:
Board of Town
Planners
Malaysia
X
S8 of the Town
Planners Act 1995
[Act 538]
X
S8(c) of the
Town Planners
Act 1995 [Act
538]
Scale of Professional Fees and General Conditions
of Engagement 2005
7. Accountants:
Malaysia Institute
of Accountants
X
S10(a) of the
Accountants Act
1967
i - By-Laws (On Professional Ethics, Conduct and
Practice) of the Malaysian Institute of
Accountants
Ii - The Recommended Practice Guide 7 (Revised):A Guide to Charging for Professional Assurance
Services (Circular MF/2010)non-binding
benchmark for professional accountants in
public practice services.
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Finding No. 1 (Continue)
15
SECTOR /GOVERNING
BODY
GENERALPOWER TO
REGULATE
SPECIFICPOWER TO FIX
SCALE OFSCALE OF FEES
8. Legal
Practitioners:
(a) The Malaysian
Bar7
X
S6 of the Legal
Profession Act
1976
X
S113(3) of the
Legal Profession
Act 1976
Solicitors Remuneration Order[P.U.(A) 520/2005]
(b) Chief Judge of
Sabah & Sarawak
+ Sabah Law
Association
X X
Para.17(c) of the
Advocates
Ordinance
(Sabah Cap. 2)
Advocates RemunerationRules 1988
(G.N.S 17 of 1988)
(c) Chief Judge ofSabah & Sarawak
+ Advocates
Association of
Sarawak
X XS17(c) of the
Advocates
Ordinance
Sarawak 1958
(Sarawak
Cap.110)
Advocates RemunerationRules 1988[Swk. L.N.(F) 72]
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Finding No. 1 (Continue)
16
SECTOR /
GOVERNINGBODY
GENERAL
POWER TOREGULATE
SPECIFIC
POWER TO FIXSCALE OF SCALE OF FEES
9. Medical
Practitioners:
Malaysian
Medical council
X
S36(1) of the
Medical Act 1971
i - For medical practitioners in the private
healthcare facilities and services, the scale of
fees are made under the Private Healthcare
Facilities and Services Act 1998 [Act 586]:
Ii - Private Healthcare Facilities and Services
(Private Medical Clinics or Private DentalClinics) Regulations 2006 [P.U.(A) 137/2006]
Iii - Private Healthcare Facilities and Services
(Private Hospitals & Other Private Healthcare
Facilities) Regulations 2006 [P.U.(A) 138/2006].
10. Dental
Practitioners:
Malaysian Dental
Counci
X
S43(1) of theDental Act 1971
i - For dental practitioners in the private
healthcare facilities and services, the scale of
fees are made under the Private HealthcareFacilities and Services Act 1998 [Act 586]:
ii - Private Healthcare Facilities and Services
(Private Medical Clinics or Private Dental
Clinics) Regulations 2006 [P.U.(A) 137/2006]
Iii - Private Healthcare Facilities and Services
(Private Hospitals & Other Private Healthcare
Facilities) Regulations 2006 [P.U.(A)138/2006].
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Finding No. 2 -
17
3 sectors in which the governing authorities are empowered by aspecific provision to fix scales of fees but have yet to do so:
SECTOR/GOVERNING
BODY
SPECIFIC POWER TO FIX FEES/PRICES SCALE OF FEES
1. Midwives and
Nurses:
(a) The Malaysian
Nursing Board
X
S 5(1)(g) of the Nurses Act 1950power to fix
fees lies in the Minister through regulations
None
(b) The Malaysians
Midwives Board
X
S5(1)(f) of the Midwives Act 1966
None
2. Counsellors:
Malaysian Board ofCounsellors XS 12(h) of the Counsellors Act 1998 None
3. Food Analysts:
Malaysian Food
Analysts Council
X
S5(1)(c) of the Food Analysts Act 2011
None
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Finding No. 3 -
18
5 sectors in which the governing bodies are given the general power toregulate the sector but no scales of fees have been fixed:
SECTOR/GOVERNING
BODY
GENERAL POWER TO REGULATE THE SECTOR SCALE OF FEES
1. Optometrists:
Malaysian Optical
Council
X
S42(1) of the Optical Act 1971 None
2. Pharmacists:
Pharmacy Board
Of Malaysia
X
S22(1)(j) of the Registration of Pharmacists Act 1951
None
3. Chemists:
Malaysian Institute
Of Chemistry
X
S8 of the Chemists Act 1975
None
4. Veterinary Surgeons:
Malaysian Veterinary
Council
X
S39(1) of the Veterinary Surgeons Act 1974
None
5. Medical Assistants:
Medical Assistants
(Registration) Board
Malaysia
X
S22 of the Medical Assistants (Registration) Act 1977
None
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Finding No. 4 -
19
5 sectors prescribe fees/prices for their members even though theyare not empowered by any law:
SECTOR/GOVERNING
BODY
LEGAL
AUTHORITY TO
FIX PRICES/
FEES
SCALE OF FEES
1. Company Secretaries
The Malaysian Institute of
Chartered Secretaries and
Administrators (MAICSA)
None Yes
2. Arbitrators
(a) Malaysian Institute of
Arbitrators (MIARB)
None Rule 28.1 of the MIARB Rules 2000
and MIARB Scale of Arbitrators Fees(b) Malaysian Institute of
Architects (PAM)
None PAM Arbitration Rules 2010
3. Mediators
(a) Malaysian Institute of
Arbitrators (MIARB)
None MIARB Mediation Rules 2003
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Finding No. 4 (Continue) -
20
SECTOR/GOVERNING
BODY
LEGALAUTHORITY TO
FIX PRICES/
FEES
SCALE OF FEES
(b) Malaysian Mediation
Centre (MMC)
None Malaysian Mediation Centres rate of
mediators fees
(c) Malaysian Institute of
Architects (PAM)
None PAM Mediation Rules
4. Landscape Architects
Institute of Landscape
Architects Malaysia (ILAM)
None Institute of Landscape Architects
Malaysia Scale of Fees
5. Dental Practitioners
Malaysian Dental
Association (MDA)
None Malaysian Dental Association
Recommended Scale of Fees
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PRESENTATION OVERVIEW
Part 3 - Position of Professional Bodies Under CA 2010
Part 1 - What are Professional Bodies?
Part 4 - Future directions
21
Part 2 - Findings
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22
Professional Bodies Under the CA 2010
Under Competition Act 2010 [Act 712], price-fixing made
by the State (through legislation) or professional bodies
specifically empowered by the legislation, would fall under
the exclusion under Section 13 and paragraph (a) of theSecond Schedule of the Competition Act 2010 [Act 712].
Competition Act 2010 [Act 712] prohibits price-fixing by
professional bodies that do not have any lawful authority
to do so. However, exemptions may be granted if theCompetition Commission is satisfied that the elements in
Section 5 (a) (d) of the Competition Act 2010 [Act 712]
are fulfilled.
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23
Malaysian Practices in Regulating Prices / Fees
The scale of fees for a sector regulated by law is contained
in the statute itself, or any other legal instrument made
under any statute or other lawful authority and having
legislative effect; and
A governing body that has regulatory authority over a
sector establishes a scale of fees for that sector (either
through its specific power to fix prices/fees for that sector,
or its general powers to regulate the said sector).
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Malaysian Practices in Regulating Prices / Fees
(Continue)
In the event that a body/association in the services
sectors establishes a scale of fees without being
empowered by any lawful authority to do so, suchconduct of price-fixing is prohibited under the
Competition Act 2010 [Act 712] and does not fall
within the exclusion under Paragraph (a) of the
Second Schedule of the Competition Act 2010 [Act
712].
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25
Acknowledge That:
Professional bodies may wish to provide assistance to new
and inexperienced members by recommending benchmark
prices as a guide. However, it has been suggested that
professional bodies can still assist members without
resorting to pricing mechanisms which are anti-
competitive in nature, such as working out members
profit margin and overhead costs.
It is also feared that highly competent professionals would
leave the profession because they feel that they are notbeing rewarded enough.70 There are, however, empirical
studies that indicate that free competition is not a
hindrance and actually leads to a more overall wealth
creation.
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Application of CA 2010 Must be Considered Together
with other Important Factors such as:
a) Other Government policies/objectives and publicinterests
The regulation of professional markets may alsopursue specific Government policies and objectivesas well as public interest goals, other than thecorrection of market failures. A balance should bestruck between economic factors (avoiding
restrictions of competition) and what is consideredas non-economic factors.
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Application of CA 2010 Must be Considered Together
with other Important Factors such as (Continue):
b) Other historical, cultural, institutional and socialfactors
It is noted that competition law policy is oftenbasedon a multiple set of values that are neithereasily quantifiable nor reduced to a single economicobjective. These values may reflect a societyswishes, culture, history, institutions and other
factors that cannot be ignored nor shouldnecessarily be ignored.
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Position of other Jurisdictions
Other jurisdictions have adopted varying positions regarding
professional regulations (including price-fixing) that are made by
the State or professional bodies with legal governing authority.
It is noted that the United States, the European Union and theUnited Kingdomtake a strict position on this matter, allowing anti-
competitive professional regulations by law or delegated legal
authority only in limited circumstances.
On the other hand, Canadatakes a less rigid approach of allowing
anti-competitive professional regulations, even when the
professional body only has a general legal mandate to regulate
such profession (without the specific power to fix prices/fees).
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PRESENTATION OVERVIEW
Part 4 - Future Directions
Part 1 - What are Professional Bodies?
Part 3 - Position of Professional Bodies Under CA 2010
29
Part 2 - Findings
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30
Future Directions:
1. Meeting with 5 sectors identified in the study withNO legal authority to fix prices/fees to provide anexplanation for these practices
2. Collaboration with the Malaysian Productivity
Corporation (MPC)
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Future Directions:
4. The MyCC will assess whether the price fixing/scaleof fees should be exempted on a case-by-casebasis.
3. Since the document was uploaded on the MyCC
website, the following was noted:
i. The MAICSA withdrew their recommended
fees.
ii. Several associations have requested meetings.
iii. The MyCC requested 5 sectors to provide
explanation.
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